BLS cites rising energy prices in latest PPI

Rising energy prices were a major influence as the Producer Price Index for Finished Goods climbed 1.4% in January, the US Department of Labor’s Bureau of Labor Statistics reported on Feb. 18.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Feb. 18 -- Rising energy prices were a major influence as the Producer Price Index for Finished Goods climbed 1.4% in January, the US Department of Labor’s Bureau of Labor Statistics reported on Feb. 18. Energy goods accounted for about 75% of the broad-based advance in the finished goods, intermediate goods, and crude goods indexes, it said.

“The index for finished energy goods rose 5.1% in January, its fourth consecutive monthly increase,” BLS said. About two thirds of the advance can be attributed to an 11.5% jump in gasoline prices, it added. Increases in the liquefied petroleum gas and home heating indexes also were major factors, it said.

The PPI for intermediate materials, supplies, and components climbed 1.7% in January—its largest increase since a similar advance in August 2009, according to BLS. It noted that the index for intermediate energy goods rose 6.9% in January, its biggest increase since a 9.6% jump in November 2007. A 20.4% surge in diesel fuel prices was a major factor in the January advance, with gasoline and jet fuel indexes also making a major contribution.

BLS said its crude energy materials PPI jumped 16.8% in January. “From October through January, prices for crude energy materials climbed 27.5%, following a 9.4% gain for the 3 months ended October 2009,” it added. Two thirds of January’s monthly increase can be traced to a 25.5% surge in the natural gas index, with oil prices also contributing, DOL’s statistical service said.

The latest PPI did not surprise American Petroleum Institute Chief Economist John C. Felmy, who noted that other reports have shown that oil prices rose from December to January. “Gasoline prices also climbed. It shouldn’t be such a surprise, since retail sales figures prices which have been released also were affected by increased gasoline prices,” he told OGJ.

Felmy cautioned that BLS price indexes are a point-to-point index on a certain day each month. “If you were trying to compare the average for the month, we’ve seen prices come down since the end of January,” Felmy said.

Contact Nick Snow at nicks@pennwell.com.

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